Senegal’s Fishermen Blame BP Project for Lack of Fish

BP’s gas project on the Mauritania–Senegal maritime border, a prime fishing area, created a 500-meter exclusion zone over a natural reef, rich in fish. Fisherman income has dropped significantly. BP pledged eight artificial reefs to restore their livelihood.—bbc.com

Answer the following questions to check your understanding of the story.

1) What type of externality is described in the news clip?

a) Positive production externality

b) Positive consumption externality

c) Negative consumption externality

d) Negative production externality

2) What is the effect of BP’s commitment to build eight artificial reefs?

a) BP faces its external cost of gas production, and gas production becomes more efficient.

b) BP maximizes gas production and fishermen maximize their catches.

c) BP receives an external benefit from its actions to help fishermen.

d) The external cost that fishermen inflict on BP gas production is eliminated.

Senegal’s Fishermen Blame BP Project for Lack of Fish

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